Chapter 14: Discharge and Remedies (unedited)

Discharged

When a party's obligations under a contract are terminated.

Conditional Contract

A contract that becomes enforceable only on the happening or termination of a specified condition.

Condition Precedent

In a contract, an event that must occur for a party's duty to arise.

Condition Subsequent

In a contract, a future event that terminates the obligations of the parties when it occurs.

Concurrent Conditions

In a contract, terms under which each party's performance is conditioned on the performance of the other; occur only when the parties are required to perform for each other simultaneously.

Express Condition

A condition specifically stated in a contract and usually preceded by words such as conditioned on, if, provided that, or when.

Implied Condition

A condition that is not specifically and explicitly stated but is inferred from the nature and language of the contract.

Discharge by Perfomance

In most situations, parties discharge their obligations by doing what they respectively agreed to do under the terms of the contract.

Tender

An offer by a party in a contract to perform, along with being ready, willing, and able to perform, a duty outlined in that contract.

Complete Performance

Contract performance that occurs when all aspects of the parties' duties under the contract are carried out perfectly.

Substantial Performance

Contract performance that occurs when nearly all the terms of the agreement have been met, there has been an honest effort to complete all the terms, and there has been no willful departure from the terms of the agreement.

Material Breach

A substantial breach of a significant term or terms of a contract that excuses the nonbreaching party from further performance under the contract and gives the nonbreaching party the right to recover damages.

Mutual Rescission

Parties may agree that they simply wish to discharge each other from their mutual obligations and therefore may rescind each other from their mutual obligations and therefore may rescind or cancel the contract.

Substituted Contract

Sometimes, instead of canceling the contract and terminating their relationship, the parties want to substitute a new agreement in place of the original.

Accord and Satisfaction

Is used when one of the parties wants to substitute a different performance for his original duty under the contract.

Accord

The promise to perform the new duty.

Satisfaction

The actual performance of that new duty. Is considered an express condition that must be met before the other party's obligation to pay for the performance arises. May be judged according to either a subjective or an objective standard.

Novation

In a contract, the substitution of a third party for one of the original parties; the duties remain the same under the contract, but one original party is discharged and the third party takes that original party's place.

Objective Impossibility

It is in fact not possible to lawfully carefully out one's contractual obligations. Discharges the parties' obligations under the contract.

Subjective Impossibility

It would be very difficult to carry out the contract..

Three main situations in which the courts find objective impossibility.

(1) Destruction of the subject matter. (2) Death or incapacity of a party whose personal services are necessary to fulfill the terms of the contract. (3) Subsequent illegality.

Commercial Impracticability

Is seen by some as a response to a somewhat unfair harshness of the objective impossibility standard. Is used when performance is still objectively possible but would be extraordinarily injurious or expensive to one party.

Court of Law

A court in which the only remedies that could be granted were things of value, such as money damages. In the early English king's courts, courts of law were distinct from courts of equity.

Court of Equity

A court that decides controversies and administers justice according to the rules, principles, and precedents of equity.

Monetary Damages (Legal Damages)

Include compensatory, punitive, nominal, and liquidated damages. Whenever possible, courts award these damages rather than some form of equitable relief.

Compensatory Damages

Money awarded to a plaintiff as reimbursement for her or his losses; based on the amount of actual damage or harm to property, lost wages or profits, pain and suffering, medical expenses, disability, and so on.

Expectation Damages

Compensate a person for the benefit she or he expected to gain as a result of entering into the contract.

Incidental Damages

In addition to losing the benefit of the bargain, the plaintiff may suffer other losses caused directly by the breach. These losses may be compensated.

Consequential Damages (Special Damges)

In a contract, foreseeable damages that result from special facts and circumstances arising outside the contract itself. The damages must be within the contemplation of the parties at the the time the breach occurs.

Punitive Damages

Compensation awarded to a plaintiff that goes beyond reimbursement for actual losses and is imposed to punish the defendant and deter such conduct in the future.

Nominal Damages

Monetary damages awarded to a plaintiff in a very amount, typically $1 to $5, to signify that the plaintiff has been wronged by the defendant even though the plaintiff suffered no compensable harm.

Liquidated Damages (Stipulated Damage Clause)

Damages specified as a term of the contract, before a breach of contract occurs.

Duty to Mitigate One's Damages

To recover damages in a breach-of-contract case, the plaintiff must demonstrate that he used reasonable efforts to minimize the damage resulting from the breach.

Recission

The termination of a contract.

Restitution

The return of any property given up under a contract.

Specific Performance (Specific Enforcement)

An order of the court requiring a breaching party to fulfill the terms of the contract.

Injuction

A court order either forcing a party to do something or prohibiting a party from doing.